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* Will hit 3 pct leverage ratio ahead of Dec 2015 target
* Achieves 20 pct increase in new current accounts
* 9 months underlying profit 539 mln stg vs 263 mln
* CEO says Nationwide is "punching above its weight"
By Matt Scuffham
LONDON, Feb 20 (Reuters) - Britain's biggest customer-ownedlender Nationwide is picking up clients from all itsbig rivals, it said on Thursday, with the number of new currentaccounts rising by 20 percent in the nine months to Dec. 31.
Nationwide is seeking to challenge the dominance ofBritain's five biggest banks, wooing customers disillusioned byscandals including the mis-selling of loan insurance and therigging of benchmark interest rates.
However, the big five of Lloyds Banking Group,Royal Bank of Scotland, Barclays, HSBC and Santander UK continue to control more than 80percent of the market for personal current accounts.
The mutual society said that 316,700 personal currentaccounts were opened during the period, up 20 percent on a yearearlier, helped by new rules making it easier to switchaccounts. The increase helped it to more than double underlyingprofit to 539 million pounds ($901 million).
Chief Executive Graham Beale told Reuters that Nationwide,which is also Britain's third-largest mortgage lender andsecond-biggest provider of saving products, was picking upcustomers from all its major rivals.
"We are punching above our weight in all of our principlemarket places. We're more than holding our own against theestablished banking models," Beale said.
Nationwide, which currently has a 6 percent share of thepersonal current account market, is offering interest of 5percent a year on some accounts to entice customers and help itto reach its target for a 10 percent market share.
The lender was viewed by some analysts as the most likelybeneficiary from the problems at the Co-operative Bank, whichhas fallen under the control of investors including U.S. hedgefunds after a 1.5 billion pound capital shortfall was exposed.
SWITCHING BOOST
But Beale played down the Co-op's demise as a factor in itssuccess and pointed to the significance of the new rulescompelling banks and other lenders to ensure that customers canswitch accounts within seven working days.
Seven-day switching, introduced last September, resulted ina 17 percent rise in customers moving accounts across theindustry in the fourth quarter of 2013.
"We are taking customer share right across the piece.Through the current account transfer process, we are gainingthree times more customers than we are losing," Beale said.
Nationwide also said it is on track to hit a key capitalstrength target ahead of the deadline set by the UK's financialregulator.
It raised 550 million pounds through the issue of a new typeof debt to institutions in November and said that capitalraising lifted its leverage ratio to 2.6 percent.
Beale said that leaves Nationwide well placed to hit theregulator's 3 percent leverage ratio target "significantlyahead" of the December 2015 deadline.
Leverage measures the amount of equity a bank holds as apercentage of its loans, without adjustments for risk. A 3percent leverage ratio means that Nationwide can lend up to 33pounds for each pound of capital it holds in reserve.
Beale said the bank is also considering issuing additional Tier 1 debt to bolster its capital position.
